Free trade agreements with ASEAN countries: very worthwhile

Negotiations regarding FTAs are well underway with various ASEAN countries. A study by S-GE has calculated the benefits that free trade with three countries would bring Swiss companies.

Switzerland and the EFTA are currently in negotiations in Southeast Asia regarding a free trade agreement (FTA) with the AESAN countries Indonesia, Malaysia, the Philippines, Thailand and Vietnam. The ASEAN region is one of the world's most attractive growth areas with a development potential which is unparalleled: 600 million inhabitants and a middle class which numbers 50 to 60 million more solvent consumers year after year.

There is no question that, given these two numbers alone, a FTA with the five most important and most economically powerful ASEAN countries ought to pay off. This is particularly the case with respect to easier market access (for example thanks to the elimination of technical barriers to trade), optimized legal and investment protection (better planning and legal certainty), and the complete or partial reduction of trade duties.

Swiss companies would save 80.2 million USD in customs duties annually, if FTAs were to be concluded with Indonesia, Malaysia and Vietnam. This is demonstrated by a current study by Switzerland Global Enterprise. Entitled «Free Trade Ahead – Vietnam, Indonesia, Malaysia / The Savings Potential of the FTAs for Swiss Exporters», the study examines the potential tariff savings which could be made from trading with Indonesia, Malaysia and Vietnam. The study will be presented and discussed in greater detail at S-GE Impulse: Asia, which will focus in depth on the business opportunities for Swiss SMEs in the ASEAN region and other Asian growth regions.

According to the study the potential tariff savings would be highest for Swiss exports to Indonesia (47.6 million USD). The savings potential would be significantly lower for exports to Malaysia (14.5 million USD) and Vietnam (18.1 million USD). However, it can be assumed that Swiss exports to the ASEAN region will continue to steadily increase in the next few years and the potential tariff savings will also increase at the same pace. The export of watches (to Vietnam), agricultural products (to Indonesia and Malaysia), MEM industry products (to Indonesia and Malaysia), and chemical and pharmaceutical products (to Indonesia) would benefit most from FTAs with these three ASEAN countries.

An FTA with Switzerland and the EFTA respectively would be the first FTA for the ASEAN countries outside the Asia Pacific region and would therefore be all the more valuable for the Swiss export industry, as it would provide the country with significant trade advantages compared with its competitors from the EU and the USA.

Switzerland Global Enterprise: Free Trade Ahead – Vietnam, Indonesia, Malaysia / The Savings Potential of the FTA’s for Swiss Exporters

S-GE-Impulse: Asia - Rising Middle Class: The Asian century has started

Country Consulting Southeast Asia

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